Wayne A. Hicks, 52, in a negotiated plea agreement with federal prosecutors, pleaded guilty in Fayetteville to conspiracy to defraud

Wayne A. Hicks, 52, in a negotiated plea agreement with federal prosecutors, pleaded guilty in Fayetteville to conspiracy to defraud the federal government of income taxes.According to the U.S. Attorney's Office, the alternative banking system, known as The members were involved in the so-called Patriot Movement and were generally anti-government and did not pay federal taxes. Some schemed to overthrow the federal government, according to prosecutors.Hicks promoted the alternative banking system at seminars and membership grew from about 800 in January 2005 to 3,000 members by April 2007, according to prosecutors.Hicks, who operated the Liberty Tree restaurant in Berryville, is also associated with the "Liberty Dollar," an alternative currency.
Americans for Lawful Financial Independence and Information operated out of an office in Berryville and maintained several bank accounts, according to prosecutors. Services included bank-like accounts and the use of electronic money orders to pay bills and transfer funds. Members were not required to provide Social Security numbers and were able to get out of the traditional banking system, conceal their financial transactions from the IRS and avoid paying taxes.Members would deposit money into their accounts by mailing deposits or by wire transfers. They would access their accounts at a Web site and by printing digital money orders that could be used just like traditional checks.Membership was by invitation only, new members had to be referred by an existing member, according to prosecutors. That arrangement allowed the system to operate for several years without government detection.Hicks promoted the scheme at Pinnacle Quest International seminars in Mexico, on anti-government Web sites and through a newsletter with a built-in e-mail system, according to prosecutors. Pinnacle Quest International provided speakers who would present various schemes and information on how to avoid paying federal income taxes.
Hicks maintained bank accounts at Bank of the Ozarks, Bank of Eureka Springs, Security Pacific Bank and ANB Financial for short periods of time to house accounts, according to prosecutors. Each bank became suspicious of the financial transactions being conducted and asked Hicks to close the accounts.Money in the accounts was co-mingled and the only way to know who the money actually belonged to was through the records Hicks maintained at his business location. Those records were seized by the IRS on May 10, 2006, according to court records. Hicks has since provided additional records, including transactions from May 10, 2006, through April 2007.
Hicks admitted the last tax return he filed with the IRS was for the tax year 1992 and he agreed he owes taxes on income he received from 2003 through 2006.
Hicks will be sentenced at a later date. He is free on $10,000 bond but was required to turn over his passport and restrict his travel to parts of Arkansas and Missouri, unless given prior approval from the U.S. Probation Office.Hicks faces up to five years in prison, a fine of up to $250,000 or both. He may also be required to pay restitution.There have several related lawsuits filed involving Hicks and the scheme. The Arkansas Securities Department issued a cease and desist order against Hicks and MYISCIS on Feb. 23, 2007.N.R. Smith, LLC won a default judgment, alleging fraud, conversion and fraudulent transfer of funds against Hicks for $607,663, interest of $79,612 and costs of $850.JP Morgan Chase Bank won a default judgment against Hicks, MYICIS and another person who was never located for $157,559, plus interest and attorney fees, alleging fraud.Another case, seeking a $1 million lien against Hicks was stayed after ANB Financial went into receivership May 9.A Web site was created in October 2007 aimed at recovering funds deposited with Hicks and then frozen by the government.